In Volume One of Capital Karl Marx mapped a new continent, the terra incognita of industrial capitalism, and from the outset he warned readers that they were entering a fantasy land where nothing is as it seems. Look at his choice of verbs in the very first sentence: 'The wealth of societies in which the capitalist mode of production prevails appears as an "immense collection of commodities"; the individual commodity appears as its elementary form.' (My emphasis.) Though less dramatic than the famous opening sentence of The Communist Manifesto ('A spectre is haunting Europe...'), this makes a similar point: we are entering a world of phantoms and apparitions, a secular version of Dante's Inferno.

Other imagined hells provide further embellishment for his picture of empirical reality:

From the motley crowd of workers of all callings, ages and sexes, who throng around us more urgently than did the souls of the slain around Ulysses, on whom we see at a glance the signs of overwork, without referring to the Blue Books under their arms, let us select two more figures, whose striking contrast proves that all men are alike in the face of capital – a milliner and a blacksmith.

This is the cue for a story about Mary Anne Walkley, a 20-year-old girl who died 'from simple overwork' after labouring uninterruptedly for more than 26 hours making millinery for the guests at a ball given by the Princess of Wales in 1863. Her employer ('a lady with the pleasant name of Elise', as Marx notes caustically) was dismayed to find that the girl had died without finishing the bit of finery she was stitching.

If these characters hadn't existed, Charles Dickens might have been obliged to invent them. Gesturing at the books on his shelves, Marx would sometimes say, 'They are my slaves, and they must serve me as I will.' The task of this unpaid workforce was to provide raw material which could then be shaped for his own purposes. The first volume of Capital has quotations from the Bible, Shakespeare, Goethe, Milton, Voltaire, Homer, Balzac, Dante, Schiller, Sophocles, Plato, Thucydides, Xenophon, Defoe, Cervantes, Dryden, Heine, Virgil, Juvenal, Horace, Thomas More and Samuel Butler – as well as allusions to horror tales about werewolves and vampires, German chap-books, English romantic novels, popular ballads, songs and jingles, melodrama and farce, myths and proverbs.

Capital has spawned countless texts analysing Marx's labour theory of value or his law of the declining rate of profit, but only a handful of critics have given serious attention to Marx's own declared ambition to produce a work of art. One deterrent, perhaps, is that its multi-layered structure evades easy categorization. The book can be read as a vast Gothic novel whose heroes are enslaved and consumed by the monster they created ('Capital which comes into the world soiled with gore from top to toe and oozing blood from every pore'); or as a Victorian melodrama (in his 1962 study The Tangled Bank: Darwin, Marx, Frazer and Freud as Imaginative Writers, S.E. Hyman even proposes an apt title for the drama: The Mortgage on Labour-Power Foreclosed); or as a black farce (in debunking the 'phantom-like objectivity' of the commodity to expose the difference between heroic appearance and inglorious reality Marx is using one of the classic methods of comedy, stripping off the gallant knight's armour to reveal a tubby little man in his underpants); or as a Greek tragedy ('Like Oedipus, the actors in Marx's recounting of human history are in the grip of an inexorable necessity which unfolds itself no matter what they do,' C. Frankel writes in Marx and Contemporary Scientific Thought. 'And yet all that links them to this fate is their own tragic blindness, their own idées fixes, which prevent them from seeing the facts until too late'). Or perhaps it is a satirical utopia like the land of the Houyhnhnms in Gulliver's Travels, where every prospect pleases and only man is vile: in Marx's version of capitalist society, as in Jonathan Swift's equine pseudo-paradise, the false Eden is created by reducing ordinary humans to the status of impotent, alienated Yahoos.

Had Marx wished to produce a straightforward text of classical economics he could have done so - and in fact he did. Two lectures delivered in June 1865, later published as Value, Price and Profit, give a concise and lucid précis of his theories about commodities and labour. So why is Capital, which covers the same ground, so utterly different in style? A clue can be found in one of the very few analogies he permitted himself in Value, Price and Profit, when explaining his belief that profits arise from selling commodities at their 'real' value and not, as one might suppose, from adding a surcharge. 'This seems paradox and contrary to everyday observation,' he writes. 'It is also paradox that the earth moves round the sun, and that water consists of two highly inflammable gases. Scientific truth is always paradox, if judged by everyday experience, which catches only the delusive nature of things.'

The function of metaphor is to make us look at something anew by transferring its qualities to something else, turning the familiar into the alien or vice versa. Ludovico Silva, a Mexican critic of Marx, has drawn on the etymological meaning of 'metaphor' as a transfer to argue that capitalism itself is a metaphor, an alienating process which displaces life from subject to object, from use-value to exchange-value, from the human to the monstrous. In this reading, the literary style Marx adopted in Capital is not a colourful veneer applied to an otherwise forbidding slab of economic exposition, like jam on thick toast; it is the only appropriate language in which to express 'the delusive nature of things', an ontological enterprise which cannot be confined within the borders and conventions of an existing genre such as political economy, anthropological science or history. In short, Capital is entirely sui generis. There has been nothing remotely like it before or since - which is perhaps why it has been so consistently neglected or misconstrued.

Since the Cold War, like Molière's bourgeois gentleman who discovered to his amazement that for more than forty years he had been speaking prose without knowing it, Western bourgeois intellectuals have belatedly discovered that they absorbed some of Marx's ideas without ever noticing. 'We should not be too quick to congratulate ourselves on the defeat of Marx, along with Marxism,' the right-wing economist Jude Wanniski wrote in 1994. 'The forces of reaction that he correctly identified have to be conquered by each succeeding generation, a monumental task that now faces ours.' Wanniski, who coined the phrase 'supply-side economics', cited Capital as the main inspiration for his theory that production rather than demand was the key to prosperity, and warned that Marx came 'extremely close to the truth' in his suggestion that capitalism sowed the seeds of its own destruction: 'That is, if capitalism requires relentless competition, yet capitalists are doing everything they can do to destroy competition, we have a system that is inherently unsustainable - as with animals who devour their young.'

In October 1997 the economics correspondent of the New Yorker, John Cassidy, reported a conversation with a British investment banker working in New York. 'The longer I spend on Wall Street,' the banker said, 'the more convinced I am that Marx was right... I am absolutely convinced that Marx's approach is the best way to look at capitalism.' His curiosity aroused, Cassidy read Marx for the first time and saw his friend's point. He found 'riveting passages about globalisation, inequality, political corruption, monopolisation, technical progress, the decline of high culture, and the enervating nature of modern existence - issues that economists are now confronting anew, sometimes without realising that they are walking in Marx's footsteps'. It was a belated reading of Marx in the 1990s that inspired another financial journalist, James Buchan, to write his brilliant study Frozen Desire: An Inquiry into the Meaning of Money (1997). As Buchan explained, 'Marx is so embedded in our Western cast of thought that few people are even aware of their debt to him.'

The fall of the bourgeoisie and the victory of the proletariat have not come to pass. But Marx's errors or unfulfilled prophecies about capitalism are eclipsed and transcended by the piercing accuracy with which he revealed the nature of the beast. While all that is solid still melts into air, Capital's vivid portrayal of the forces that govern our lives - and of the instability, alienation and exploitation they produce - will never lose its resonance, or its power to bring the world into focus. As that New Yorker article concluded in 1997: 'His books will be worth reading as long as capitalism endures.' Far from being buried under the debris of all those toppled Stalinist icons and statues, Marx may only now be emerging in his true significance. He could yet become the most influential thinker of the twenty-first century.

[Francis Wheen's study of Capital will be published next January by Atlantic Books. A list of the pieces that have appeared to date in this series, with the links to them, is here.]